German Stocks Decline as Cyprus Debates Bailout Plan

German stocks declined for a second
day as business confidence unexpectedly fell and Cypriot
lawmakers struggled to raise 5.8 billion euros ($7.5 billion)
needed to win a European bailout.

MAN AG sank the most in almost eight months after
Volkswagen AG made a low-ball initial offer as it pushes for
full control of the truckmaker. BASF AG, the world’s biggest
chemical maker, dropped 0.6 percent. Adidas AG (ADS), the second-
largest producer of sporting goods, gained 0.6 percent as U.S.
rival Nike Inc. reported an increase in orders from China and a
rebound in profit margins.

The DAX Index (DAX) retreated 0.2 percent to 7,916.26 at 10:37
a.m. in Frankfurt. The gauge has fallen 1.6 percent this week,
on course for the largest decline since Feb. 8, as euro-area
ministers proposed a levy on Cyprus bank deposits to help pay
for the nation’s rescue package. The broader HDAX Index lost 0.3
percent today.

“Enduring discussions about possible measures for Cyprus
instead of a solution have led to continued uncertainty in the
markets,” Roger Peeters, chief executive officer at Close
Brothers Seydler Research in Frankfurt, wrote in an e-mail.

The DAX has still risen 4 percent this year as reports
pointed to a strengthening global economy amid speculation that
central banks will maintain stimulus measures.

Cypriot lawmakers will begin a debate today on legislation
to unlock bailout funds. The European Central Bank has said it
will cut emergency funds for the island nation’s lenders after
March 25 unless it agrees on a bailout with international
creditors. Euro-area finance ministers expect a proposal from
Cyprus “as rapidly as possible” to raise the 5.8 billion euros
needed to trigger the emergency loans, they said in a statement
late yesterday.

Business Confidence

In Germany, business confidence unexpectedly fell from a
10-month high amid the Cypriot crisis. The Ifo institute’s
business climate index, based on a survey of 7,000 executives,
declined to 106.7 this month from 107.4 in February. Economists
had predicted a gain to 107.8, according to the median of 42
forecasts in a Bloomberg survey.

MAN lost 4.4 percent to 83.28 euros, the largest decline
since July 26. Volkswagen, which already owns 75.03 percent of
the Munich-based company’s voting rights, will offer 80.89 euros
apiece for the rest of the shares.

BASF slipped 0.6 percent to 70.89 euros. The shares have
retreated 5.6 percent this week for the biggest drop in 10
months.

Lanxess Slips

Lanxess AG (LXS), the German chemical maker that joined the DAX
in September, declined 2.6 percent to 56.81 euros as Bank of
America Corp. downgraded the shares to neutral from buy, and
reduced 2013 earnings estimates by 45 percent.

Adidas advanced 0.6 percent to 78.61 euros, snapping three
days of losses, as Nike reported third-quarter profit that
topped analysts’ estimates. Nike’s gross margin widened for the
first time in nine quarters and orders for its branded goods in
China, excluding changes in currency exchange rates, gained.